Answer to Question #72504 in Finance for jones

Question #72504
1. The profits from projects A and B have variances of $500, 000 and $45, 000 respectively. Which of the two projects is more risky if the expected values of the profits are $5000 and $500, respectively?
2. A project has expected risky cash flows of $90, 000 in perpetuity while the certainty equivalent cash flows are $60, 000. The risk free rate is 10%. What is the risk adjusted rate of return on the risky cash flows?
3. Should an investor invest in this project if the initial cost is $650, 000?
4. What would be the internal rate of return if the cost of the project was $600, 000?
1
Expert's answer
2018-01-16T09:46:17-0500
Dear jones, your question requires a lot of work, which neither of our experts is ready to perform for free. We advise you to convert it to a fully qualified order and we will try to help you. Please click the link below to proceed: Submit order

Need a fast expert's response?

Submit order

and get a quick answer at the best price

for any assignment or question with DETAILED EXPLANATIONS!

Comments

No comments. Be the first!

Leave a comment

LATEST TUTORIALS
New on Blog
APPROVED BY CLIENTS